Traditional Economy
This type of economy depends on customs and skills passed down through generations; people usually produce just enough to survive.
What is Traditional Economy?
What is a command economy?
What is Command a government that owns/controls many/all means of production and distribution?
In socialist systems, who owns some basic means of production while private businesses also exist?
What is the government (state) owns some basic means of production, with private business ownership also allowed?
Who decides what will be produced in a market economy?
What is Consumers (through purchases) and producers in the marketplace decide?
List the three basic economic questions every economic system must answer.
What is... What will be produced? How will products be produced? How will products be allocated?
Name one real-world example or region given in the materials where traditional economies still exist.
What is ___?
Examples: villages in the Andes, Amazon Rainforest communities, Aborigines of Australia, rural areas in Africa.
What are the two primary types of command economies listed in the materials?
What is Communism and Socialism?
Why are many socialist countries often called "welfare states"? Give one example country.
What is governments provide free medical care, education, and other benefits; example: Norway (also Sweden, Denmark)?
Explain briefly how prices are determined in a market system.
What is prices are controlled by supply and demand?
Give two factors that influence the decision “What will be produced?”
What is ___?
Factors: profitability, consumer demand, resource availability.
Explain how the three basic economic questions are answered in a traditional economy: What will be produced? How will products be produced? How will products be allocated?
What is What: same things produced by prior generations; How: same methods as ancestors; Allocation: shared within community, consumed by community?
In a communist command economy, who sets wages, prices, and production quotas?
What is the government (central planners)?
How do socialist systems answer the question "How will products be allocated?"
What is Allocation: consumers' incomes determine purchases, but incomes are influenced/set by the government?
Name three countries that have market economies.
What is United States, Japan, and India?
For the question “How will products be produced?” list three sub-decisions or considerations mentioned in the materials.
What is __-?
Considerations: which resources to use, which technologies to employ, which production methods are most efficient.
Identify two major problems of traditional economies.
What is ___?
Problems: little opportunity for growth; few new ideas/technology; inability to save/invest.
Explain how a communist system decides what will be produced and how that can lead to shortages of consumer goods.
What is government plans production based on state goals (e.g., industry/military) rather than consumer needs → consumer goods shortages; quotas and quantity focus reduce quality and efficiency?
List two problems of socialist economies discussed in the text and explain how each arises.
What is ___?
Problems: high taxes leading to less disposable income; less efficient production because state planning may reduce competition/innovation; wages based on government valuation not solely skill.
Describe two roles the government still plays in market economies despite not controlling production.
What is ___?
Government roles: regulates economy (laws, safety, labor laws), provides public goods and services (defense, roads, postal service), and works to lessen recessions/market failures?
Explain how a command economy might answer “How will products be allocated?” using one example.
What is ___?
Example: In a communist economy, government allocates products to workers based on assigned jobs and incomes set by the state; consumer choice has little effect, causing limited access for many citizens.
Define "subsistence" and explain why subsistence production limits economic growth in traditional systems.
What is Subsistence = barely supports life; subsistence production means people consume what they produce so cannot save/invest, limiting growth?
Compare and contrast communism and socialism using three specific differences described in the documents (one sentence each difference).
Differences: (1) Ownership — communism: government owns practically all means; socialism: government owns basic means, private ownership exists. (2) Investment — communism: no private investment; socialism: private capital can invest alongside state. (3) Allocation/consumer role — communism: planners decide largely without consumer input; socialism: supply/demand considered more, consumers influence some production.
Describe how taxation and government services are linked in socialist economies and explain one effect on individuals’ purchasing power.
What is high taxes fund human services (education, healthcare). Effect: individuals have less money to spend, which can lower purchasing power?
Explain how income and resource ownership influence who gets goods in a market economy.
What is income determines access: people with higher-valued resources earn higher incomes and can buy more/higher-priced products; resource ownership leads to unequal purchasing power?
Compare how the question “What will be produced?” is answered differently by a traditional economy, a communist economy, and a market economy (one clear sentence for each system).
What is... Traditional: same goods as ancestors / necessities; Communist: government decides based on state plans (may prioritize industry/military); Market: producers respond to consumer demand—goods consumers want and will buy?